Why my 401k withdrawal after loosing job, 1099-R box 7 shows Code 7 (Normal Distribution). I am 37 yrs old

[Partha]

Hi, 

In Feb 2017 I lost my job and moved back to India. Then I withdrew my 401k . I am 37 yrs old. But when i received my 1099-R, Box 7 has Code 7 (Normal Distribution). Shouldn't it be 1. What should i do. 

Should i file the Taxes with Code 1 or Code 7. Any help is appreciated

Thanks

[dmertz · Accepted solution]

Yes, it should be code 1 if you were under age 59½.  I suggest contacting the plan to obtain a corrected Form 1099-R.

Otherwise, if you are using the CD/download version of TurboTax you can switch to forms mode, open the 1099-R form and then mark TurboTax's box A1 on the form to indicate that it should have had code 1.

If there was no tax withholding, you can also simply substitute a code 1 for the code 7 on the form.  With no tax withholding, the details of the entered 1099-R form are not included in your e-filing, so the IRS will not be aware that you made the code substitution to obtain proper reporting.